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SECURITIES AND EXCHANGE COMMISSION



Washington, D.C. 20549



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Form 10-QSB



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(MARK ONE)

|      |  |                                                                                                                                  
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------
|[ X ] |  | Quarterly report under Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the quarterly period ended March 31, 2001.

Commission File No. 0-31363

Vocal Communications, Inc.(Exact Name of Registrant as Specified in its Charter)

|                                                                       |  |                                                
|---------------------------------------------------------------------- |  | -----------------------------------------------
|Colorado(State or other jurisdiction of
incorporation or organization) |  | 84-1365550I.R.S. Employer
Identification Number
|                                                                      
|PO Box
5255
Phoenix, Arizona(Address of Principal Executive Offices)   |  | 85010(Zip Code)                                

480-922-8444(The Registrants telephone number, including
area code)

Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) if the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:

|          |  |           
|--------- |  | ----------
|Yes  [X] |  | No  [   ]



As of March 31, 2001, the registrant had 7,200,000 shares of common stock
outstanding.

1



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TABLE OF CONTENTS



| |                                                                                                 |  |  |  |  |  |  | 
| | ----------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
| | Item 2    Management's Discussion and Analysis of Financial Condition and Results of Operations
| | Item 1    Legal Proceedings                                                                    
| | Item 2    Changes in Securities and Use of Proceeds                                            
| | Item 3    Defaults Upon Senior Securities                                                      
| | Item 4    Submission of Matters to a Vote of Security Holders                                  
| | Item 5    Other Information                                                                    
| | Item 6    Exhibits, Financial Statement Schedules and Reports on Form 8-K                      



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##### Table of Contents



Vocal Communications, Inc.
Quarterly Report on Form 10-QSB For the Quarter Ended March 31, 2001
Table of Contents

Part I  Financial Information

|     |  |   |  |                                                                                       |  |      |   | 
|---- |  | - |  | ------------------------------------------------------------------------------------- |  | ---- | - | 
|     |  |   |  |                                                                                       |  | Page
|     |  |   |  |                                                                                       |  |     
|Item |  | 1 |  | Financial Statements  Unaudited:                                                     |  |      | 3
|    
|    
|    
|    
|     |  |   |  |   Balance
Sheets as of March 31, 2001 (unaudited) and December 31, 2000              |  |      | 4
|    
|    
|    
|    
|     |  |   |  |   Statements
of Operations for the three months ended March 31, 2001 (unaudited)     |  |      | 5
|    
|    
|    
|    
|     |  |   |  |   Statements
of Cash Flows for the three months ended March 31, 2001 (unaudited)     |  |      | 6
|    
|    
|    
|    
|     |  |   |  |   Notes to Financial Statements                                                      |  |      | 7
|    
|    
|    
|    
|Item |  | 2 |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  |      | 8

Part II  Other Information

|           |  |   |  |                                                                 |  |    |    | 
|---------- |  | - |  | --------------------------------------------------------------- |  | -- | -- | 
|Item       |  | 1 |  | Legal Proceedings                                               |  |    | 10
|          
|          
|          
|          
|Item       |  | 2 |  | Changes in Securities and Use of Proceeds                       |  |    | 10
|          
|          
|          
|          
|Item       |  | 3 |  | Defaults Upon Senior Securities                                 |  |    | 10
|          
|          
|          
|          
|Item       |  | 4 |  | Submission of Matters to a Vote of Security Holders             |  |    | 10
|          
|          
|          
|          
|Item       |  | 5 |  | Other Information                                               |  |    | 10
|          
|          
|          
|          
|Item       |  | 6 |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K |  |    | 10
|          
|          
|          
|          
|Signatures |  |   |  |                                                                 |  | 11

2



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##### Table of Contents



Vocal Communications, Corp.
(A Development Stage Company)
BALANCE SHEETS

ASSETS

|                                           |                                                                                                        |                      |                           |          |        |                |         |              |         |         |  | 
|------------------------------------------ | ------------------------------------------------------------------------------------------------------ | -------------------- | ------------------------- | -------- | ------ | -------------- | ------- | ------------ | ------- | ------- |  | 
|                                           |                                                                                                        |                      |                           |          |        | March 31, 2001 |         | December 31,
|                                           |                                                                                                        |                      |                           |          |        | (unaudited)    |         | 2000        
|                                           |                                                                                                        |                      |                           |          |        |                |         |             
|Current Assets:                           
|                                          
|                                          
|                                          
|                                          
|                                           | Cash and cash equivalents                                                                              |                      | $                         | 9,090    |        |                | $       | 117,048      |        
|                                          
|                                          
|                                          
|                                          
|                                           | Prepaid expenses                                                                                       |                      |                           | 3,565    |        |                |         | 3,565        |        
|                                           |                                                                                                        |                      |                           |          |        |                |         |              |         |         | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                                        | Total Current Assets |                           |          | 12,655 |                |         |              | 120,613 |        
|                                          
|                                          
|                                          
|                                          
|Intangible assets                         
|                                          
|                                          
|                                          
|                                          
|                                           | Goodwill, net                                                                                          |                      |                           | 237,500  |        |                |         | 250,000      |        
|                                          
|                                          
|                                          
|                                          
|                                           | Software licenses and development costs, net                                                           |                      |                           | 103,076  |        |                |         | 92,168       |        
|                                           |                                                                                                        |                      |                           |          |        |                |         |              |         |         | 
|                                          
|                                          
|                                          
|                                          
|Total Assets                               |                                                                                                        | $                    | 353,231                   |          |        | $              | 462,781 |             
|                                           |                                                                                                        |                      |                           |          |        |                |         |              |         |         | 
|                                          
|LIABILITIES AND STOCKHOLDERS EQUITY      
|                                          
|                                          
|                                          
|                                          
|Current Liabilities:                      
|                                          
|                                          
|                                          
|                                          
|                                           | Accounts payable                                                                                       |                      |                           | 5,211    |        |                |         | 9,034        |        
|                                          
|                                          
|                                          
|                                          
|                                           | Accrued wages                                                                                          |                      |                           | 22,000   |        |                |         |             |        
|                                          
|                                          
|                                          
|                                          
|                                           | Accrued liability                                                                                      |                      |                           | 175,000  |        |                |         | 175,000      |        
|                                           |                                                                                                        |                      |                           |          |        |                |         |              |         |         | 
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                                        |                      | Total Current Liabilities |          |        | 202,211        |         |              |         | 184,034 | 
|                                           |                                                                                                        |                      |                           |          |        |                |         |              |         |         | 
|                                          
|                                          
|                                          
|                                          
|Commitments:                               |                                                                                                        |                      |                          |          |        |                |        |             
|                                          
|                                          
|                                          
|                                          
|Stockholders Equity:                     
|                                          
|                                          
|                                          
|                                          
|                                           | Common stock, .001 par value, 100,000,000 shares authorized,
7,200,000   shares issued and outstanding |                      |                           | 7,200    |        |                |         | 7,200        |        
|                                          
|                                          
|                                          
|                                          
|                                           | Additional paid in capital                                                                             |                      |                           | 113,800  |        |                |         | 113,800      |        
|                                          
|                                          
|                                          
|                                          
|                                           | Common stock subscribed                                                                                |                      |                           | 312,902  |        |                |         | 306,602      |        
|                                          
|                                          
|                                          
|                                          
|                                           | Deficit accumulated during development stage                                                           |                      |                           | (282,882 | )      |                |         | (148,855     | )      
|                                           |                                                                                                        |                      |                           |          |        |                |         |              |         |         | 
|                                          
|                                          
|                                          
|                                          
|Total Stockholders Equity                 |                                                                                                        |                      | 151,020                   |          |        |                | 278,747 |             
|                                           |                                                                                                        |                      |                           |          |        |                |         |              |         |         | 
|                                          
|                                          
|                                          
|                                          
|Total Liabilities and Stockholders Equity |                                                                                                        | $                    | 353,231                   |          |        | $              | 462,781 |             
|                                           |                                                                                                        |                      |                           |          |        |                |         |              |         |         | 

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##### Table of Contents



Vocal Communications, Corp.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM THE DATE OF INCEPTION,
JULY 14, 2000, THROUGH MARCH 31, 2001 (UNAUDITED)
AND THE THREE MONTHS ENDED MARCH 31, 2001 (UNAUDITED)

|                                    |                    |           |                      |   |   |           |      |  
|----------------------------------- | ------------------ | --------- | -------------------- | - | - | --------- | ---- | -
|                                    | CUMULATIVE         |           |                     
|                                    | DURING DEVELOPMENT |           | THREE MONTHS         |  
|                                    | STAGE              |           | ENDED MARCH 31, 2001
|Revenues                            |                    |          |                      |   | $ |          |     
|                                   
|                                   
|                                   
|                                   
|Cost of Revenues                    |                    |          |                      |   |   |          |     
|                                    |                    |           |                      |   |   |           |     
|                                   
|                                   
|                                   
|                                   
|Gross Profit                        |                    |          |                      |   |   |          |     
|                                   
|                                   
|                                   
|                                   
|General and administrative expenses |                    | 280,966   |                      |   |   | 133,548   |     
|                                    |                    |           |                      |   |   |           |      |  
|                                   
|                                   
|                                   
|                                   
|Net Loss from Operations            |                    | (280,966  | )                    |   |   | (133,548  | )   
|                                    |                    |           |                      |   |   |           |     
|                                   
|                                   
|                                   
|                                   
|Other Income (Expense):            
|                                   
|                                   
|                                   
|                                   
|Interest expense                    |                    |           | (73                  | ) |   |           |     |  
|                                   
|                                   
|                                   
|                                   
|Interest income                     |                    |           | 17                   |   |   |           |    
|                                   
|                                   
|                                   
|                                   
|Foreign currency transaction loss   |                    |           | (1,860               | ) |   |           | (479 | )
|                                    |                    |           |                      |   |   |           |     
|                                   
|                                   
|                                   
|                                   
|Net Loss                            |                    | (282,882  | )                    |   | $ | (134,027  | )   
|                                    |                    |           |                      |   |   |           |     
|                                   
|                                   
|                                   
|                                   
|Basic Loss Per Common Share         |                    | (.04      | )                    |   | $ | (0.02     | )   
|                                    |                    |           |                      |   |   |           |     
|                                   
|                                   
|                                   
|                                   
|Weighted Average Shares Outstanding |                    | 7,200,000 |                      |   |   | 7,200,000 |     
|                                    |                    |           |                      |   |   |           |     

5



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##### Table of Contents



Vocal Communications, Corp.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM THE DATE OF INCEPTION, JULY 14, 2000, THROUGH
MARCH 31, 2001 (UNAUDITED) AND THE THREE MONTHS ENDED MARCH 31, 2001 (UNAUDITED)

|                                                  |                                                                             |                                                                                                       |                                           |          |          |          |          |          |         |         |  
|------------------------------------------------- | --------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- | ----------------------------------------- | -------- | -------- | -------- | -------- | -------- | ------- | ------- | -
|                                                  | CUMULATIVE DURING                                                           |                                                                                                       | THREE MONTHS                             
|                                                  | DEVELOPMENT STAGE                                                           |                                                                                                       | ENDED MARCH 31, 2001                     
|                                                  |                                                                             |                                                                                                       |                                          
|Increase (Decrease) in Cash and Cash Equivalents: |                                                                             |                                                                                                       |                                           |          |         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Cash flows from operating activities:                                       |                                                                                                       |                                           |          |          |         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net Loss                                                                    |                                                                                                       |                                           | (282,882 | )        |          | $        | (134,027 | )      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Adjustments to reconcile net loss to net
cash used by operating activities: |                                                                                                       |                                           |          |          |         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             | Amortization                                                                                          |                                           |          | 23,583   |          |          |          | 17,758  |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             | Issuance of stock for services                                                                        |                                           |          | 71,000   |          |          |          |        |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Changes in Assets and Liabilities:                                          |                                                                                                       |                                           |          |          |         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             | Prepaid expenses                                                                                      |                                           |          | (3,565   | )        |          |          |        |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             | Accounts payable                                                                                      |                                           |          | 5,211    |          |          |          | (3,823  | )      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             | Accrued Wages                                                                                         |                                           |          | 22,000   |          |          |          | 22,000  |        
|                                                  |                                                                             |                                                                                                       |                                           |          |          |          |          |         
|                                                  |                                                                             |                                                                                                       | Net cash used by operating activities     |          |          | (164,653 | )        |          |         | (98,092 | )
|                                                  |                                                                             |                                                                                                       |                                           |          |          |          |          |         
|                                                  | Cash flows from investing activities:                                       |                                                                                                       |                                           |          |          |         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             | Purchase of intangible assets                                                                         |                                           |          | (139,159 | )        |          |          | (16,166 | )      
|                                                  |                                                                             |                                                                                                       |                                           |          |          |          |          |         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             |                                                                                                       | Net cash used by investing activities     |          |          | (139,159 | )        |          |         | (16,166 | )
|                                                  |                                                                             |                                                                                                       |                                           |          |          |          |          |         
|                                                  | Cash flows from financing activities:                                       |                                                                                                       |                                           |          |          |         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             | Proceeds from common stock
subscribed                                                                 |                                           |          | 312,902  |          |          |          | 6,300   |        
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             |                                                                                                       | Net cash provided by financing activities |          |          | 312,902  |          |          |         | 6,300   |  
|                                                  |                                                                             |                                                                                                       |                                           |          |          |          |          |         
|Net change in cash and cash equivalents           |                                                                             |                                                                                                       | 9,090                                     |          |          |          | (107,958 | )       
|                                                 
|                                                 
|                                                 
|                                                 
|Cash and cash equivalents at beginning of period  |                                                                             |                                                                                                       |                                          |          |          |          | 117,048  |         
|                                                  |                                                                             |                                                                                                       |                                           |          |          |          |          |         
|Cash and cash equivalents at end of period        |                                                                             | $                                                                                                     | 9,090                                     |          |          | $        | 9,090    |         
|                                                  |                                                                             |                                                                                                       |                                           |          |          |          |          |         
|Supplemental disclosure of cash flow information: |                                                                             |                                                                                                       |                                           |          |         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             | Cash paid for:                                                                                        |                                           |          |          |          |         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             | Interest paid                                                                                         |                                           | $        | 73       |          |          | $        |        |        
|                                                  |                                                                             |                                                                                                       |                                           |          |          |          |          |         
|                                                  |                                                                             | Non-cash Investing and Financing:                                                                     |                                           |          |          |          |         
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                             | Purchase of goodwill thru accrued liabilities                                                         |                                           | $        | 175,000  |          |          | $        |        |        
|                                                  |                                                                             |                                                                                                       |                                           |          |          |          |          |         
|                                                  |                                                                             | Issuance of common stock as a commission on the
acquisition agreement with Larsen International, Inc. |                                           | $        | 50,000   |          |          | $        |        |        
|                                                  |                                                                             |                                                                                                       |                                           |          |          |          |          |         

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Note 1

Summary of Significant Accounting Policies, Nature of Operations and Use of Estimates:

Basis of Presentation and Interim Financial Statements

The accompanying financial statements of Vocal Communications, Inc. (the
Company) have been prepared in accordance with generally accepted accounting
principles (GAAP), pursuant to the rules and regulations of the Securities
and Exchange Commission, and are unaudited. Accordingly, they do not include
all the information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary for a fair presentation of the results
for the interim period presented have been made. The results for the
three-month period ended March 31, 2001 may not be indicative of the results
for the entire year. These financial statements should be read in conjunction
with the Companys Annual Report on Form 10-KSB for the
period ended
December 31, 2000.

Earnings (Loss) Per Common and Common Equivalent Share

Basic earnings per share include no dilution and are computed by dividing
income available to common stockholders by the weighted average number of
shares outstanding for the period. Diluted earnings per share are not
presented as they are anti-dilutive.

Note 2
Incentive Stock Plan:

Effective as of March 15, 2001 the Board of Directors approved the adoption of
the Vocal Communications, Inc. 2001 Stock Incentive Plan (the Plan). This
Plan allows for the award of incentive stock options. The Plan has 30,000,000
shares reserved and available for grant. The exercise price per option will be
determined by the Plan Committee, which is appointed by the Board of Directors,
and set forth in the Award Agreements. During the quarter ended
March 31, 2001, 900,000 options were granted at an exercise price of $.50
per share. The shares vest immediately.

Note 3
Going Concern:

The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The company has experienced significant losses and negative cash
flows from operations for the period ended March 31, 2001.

There can be no assurances that the Company will be able to continue as a going
concern in view of its financial condition. The Companys continued existence
will depend upon its ability to obtain sufficient additional capital in a
timely manner to fund its operations and to further develop its long-term
business plan. Any inability to obtain additional financing will have a
material adverse effect on the Company, including possibly requiring the
Company to significantly reduce or cease its operations.

These factors raise substantial doubt about the ability of the Company to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

7



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##### Table of Contents






Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with the financial
statements and related notes contained in Item 1 of this report. This
discussion contains forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. We may identify
these statements by the use of words such as believe, expect, anticipate,
intend, plan and similar expressions. These forward-looking statements
involve several risks and uncertainties. Our actual results could differ
materially from those anticipated in these forward-looking statements as a
result of various factors, including the need for additional capital,
our operating losses for the periods ending December 31, 2000 and
March 31, 2001, the
economic slowdown in the telecommunications industry and the
uncertainty of the VoIP market. These forward-looking
statements speak only as of the date of this report, and we caution you
not to rely on these statements without also considering the risks and
uncertainties associated with these statements and our business addressed in
this report.

Overview

Vocal is a communication
solutions company specializing in providing audio and
voice enabled applications over the Internet ("VoIP"), including direct pc to pc, pc to phone, and phone
to pc solutions. The products and services provided by Vocal give
corporations and organizations the ability to communicate financial reports,
executive and other staff changes, product updates, or other pertinent
marketing or corporate information in a personalized real-time interactive
format. Vocal is currently developing a suite of software applications designed
to enhance the internal and externally focused communication efforts of small
and medium enterprises (smes), and small and mid-cap public corporations. Our
Vocal "Suite" of products is being designed to contain full-duplexing technology, meaning that
two may talk at the same time as in a standard telephone conversation. Vocals
VoIP technology is being designed to be firewall friendly allowing our products to operate
behind corporate firewalls thereby allowing anyone to talk to anyone at
anytime, including multi-party conversations.

We intend to offer a core group of internal and external focused communication
services to corporate clients. Our service offerings are intended to
be built around the
common goal of establishing solid recurring revenue streams. These core
services, initially focused on assisting corporations communicate in the areas
of sales & marketing, investor relations, public relations, internal
collaboration, and distance learning are currently being tested in a prototype
environment and include corporate event broadcasting, marketing & promotion
solutions, and interactive customer service solutions. Services are
expected to be
released in phases to correspond with technology development and client demand.

Vocals goal is to become a global service provider of communications
solutions. We are planning future releases of German, Dutch and Cantonese
versions of our corporate solutions in order to maximize the utilization of our
VoIP licenses in any given period. In addition, we plan to develop proprietary
VoIP applications to reduce the overall cost structure of our technology,
launching additional product line extensions into our selected global markets.

Vocal expects the market to lead it to a division structure to address
specifically focused activities in a number of different market segments. We
have identified more than 10 related business activities in which we
may offer
our core services of voice and audio enabled Broadcasting, Marketing and
Customer Service to corporate clients. We expect these follow-on opportunities
to significantly alter our business and revenue mix, with a material
diversification of the risk profile of the Company.

Results of Operations:

Revenues

Vocal Communications, Inc. (the Company) commenced operations in July of
2000 and is currently still in its developmental stages. To date, the Company
has not generated any revenues. During the current period the Company signed a
revenue sharing agreement with one of our strategic business partners, allowing
each party to cross-sell the others products and services. Additionally, the final
development of two of our services, VocalCAST and Audio Update, was completed
allowing for an expected launch of these services in the second
quarter of this year.

8



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##### Table of Contents



Cost-of-Sales

The Company did not incur any costs-of-sales related expenses in the
current period.

General and Administrative Expenses

Total general and administrative expenses for the three-months ended March
31, 2001 were $133,548. The components of general and administrative expense
for the three-month period ending March 31, 2001 are broken out as follows:

|  |  |                                                                                             
|- |  | --------------------------------------------------------------------------------------------
|  |  | Three months ending March 31, 2001                                                          
| 
| 
| 
| 
| |  | Approximately $78,000 or 58% was incurred for administrative salaries.                      
| 
| 
| 
| 
| |  | Approximately $18,000 or 14% was incurred for amortization Expense.                         
| 
| 
| 
| 
| |  | Approximately $11,000 or 8% was incurred for professional fees.                             
| 
| 
| 
| 
| |  | Approximately $8,000 or 6% was incurred for legal fees.                                     
| 
| 
| 
| 
| |  | Approximately $18,500 or 14% was incurred for all other general and administrative expenses.

Net Loss

Our net loss for the three months ending March 31, 2001 was $134,027. Our
net loss is primarily due to being a development stage entity and not having
any product sales during the current quarter. The Company expects to launch the
sales of two of its services, VocalCAST and Audio Update, in the second
quarter of this year. Additionally, the Company entered into a revenue sharing agreement
with one of our strategic business partners, which allows for the cross selling
of each others products and services.

Liquidity and Capital Resources

Since inception in July 2000, we have financed our operations primarily
through private sales of the Companys common stock. The Company
intends to continue to raise capital via private placements in accordance with
Regulation S and Regulation D of the Securities Act of
1933, and will explore other avenues for raising capital, which may
include a public offering of the Companys common
stock. At March 31, 2001, our principal source
of liquidity was approximately $13,000 in cash compared with approximately
$117,000 in cash at December 31, 2000.

We believe that we have the
financial resources, and the products and services necessary to
generate sufficient capital to meet our anticipated business requirements,
including any capital expenditures and strategic operating programs, through
the current year. Thereafter, if cash generated by operations is insufficient
to satisfy our liquidity requirements, we may need to seek additional financing
such as selling additional equity or debt securities. However, depending on
market conditions, we may consider alternative financing methods even if our
financial resources are adequate to meet the Companys anticipated business
requirements. In addition, such financing may not be available on terms
acceptable to us or at all. The sale of additional securities may result in additional dilution to our stockholders.

9



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##### Table of Contents



Part II




Item 1.  Legal Proceedings

Vocal Communications, Inc. was not involved in any legal proceedings
during the period covered by this filing.




Item 2.  Changes in Securities and Use of Proceeds

Units, comprised of
common stock and related warrants in the amount of $14,000 were
sold to investors during the current period.




Item 3.  Defaults upon Debt Securities

Not applicable.




Item 4.  Submission of Matters to a Vote of Security Voters

No matters were submitted to a vote of security holders during the period
covered by this filing.




Item 5.  Other Information

As previously disclosed in our
last Annual Report on Form 10-KSB, cash proceeds in the amount of
$306,602* were generated from the sales of units of common stock and warrants in a private offering at $.50 per unit as of December 31, 2000.
The offering was made to non-U.S. persons in accordance with
Regulations S and D,
adopted under the Securities Act of 1933. No Company
officers will receive compensation related directly or indirectly from the
sales of units; but, consultants may receive commissions or referral fees of
up to 10% of the sales price of units sold. As of March 31, 2001,
the Company has paid approximately $18,000 in commissions on the sales of units
of common stock and warrants.




Item 6.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

|                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                           |  |             |  |                              |  |            
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- |  | ----------- |  | ---------------------------- |  | -----------
|                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | Incorporated by Reference
|                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                          
|Exhibit Description                                                                                                                                                                                                                                                                                                                                                                                                                |  | Form                      |  | File Number |  | Exhibit Number               |  | Filing Date
|                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                           |  |             |  |                              |  |            
|The following exhibits
were filed pertaining to
the merger of Vocal
Communications, Inc. and
Larsen International,
Inc.  Agreement and Plan
of Merger, Plan of
Merger, Articles of
Merger, Unanimous Consent
in lieu of a special
meeting of the Board of
Directors of Larsen
International, Inc. and
Unanimous Consent in lieu
of a special meeting of
the Board of Directors
and shareholders of Vocal
Investor Financial Corp. |  | 8-K                       |  | 000-31363   |  | 2.1, 2.2, 2.3, 20.1 and
20.2 |  | 05/16/01   

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##### Table of Contents



Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this annual report to be
signed on its behalf by the undersigned, thereunto duly authorized.

|                   |  |                                                           
|------------------ |  | ----------------------------------------------------------
|Date: May 21, 2001 |  | VOCAL COMMUNICATIONS, INC.                                
|                  
|                  
|                   |  | By: /s/ C. Austin
Burrell      ___________________________
|                   |  | C. Austin BurrellChairman, President and CEO              

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